Walters: California is a high-tax state. Are more taxes a balm for its deficits?

"Catering to big business and the rich is also why red states tax their lowest earners far more than California does. They punish you when you're struggling, but give you a free pass when you're wealthy, the governor said. There's some truth to that. California's very progressive income tax system, with the nation's highest marginal rate of 13.3%, makes its state budget highly dependent on taxing incomes of its wealthiest residents, while those in low- and moderate-income brackets pay little or no income taxes."

"Nevertheless, taxes imposed by state and local governments put California in the highest ranks of the 50 states, not only in total more than $400 billion a year from all sources but in per capita terms more than $10,000 each and as a percentage of its $3.6 trillion in total personal income. The Washington-based Tax Foundation ranks Californians' state and local tax burden 48th, one of the highest in the nation, out-taxed only by New York and New Jersey."

California's progressive income tax system has the nation's highest marginal rate of 13.3%, making the state budget highly dependent on taxing wealthy residents. Low- and moderate-income residents often pay little or no state income taxes because of that progressivity. State and local governments collect more than $400 billion annually, exceeding $10,000 per capita and representing a large share of $3.6 trillion in personal income. The Tax Foundation ranks California's state and local tax burden 48th, behind only New York and New Jersey. The 2025–26 state budget totals $322 billion, with $297 billion from about a dozen taxes; local agencies add roughly $100 billion. General fund revenues are projected at $207 billion while general fund spending is budgeted at $226 billion.

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